vaultofthearchonfandomcom-20200214-history
119419-youre-kidding-me
Content ---- ---- ---- ---- ---- Like Christmas? Most people take a good chunk of time off around that holiday and will have time to play an MMO. Would be stupid not to have a sale then, preferably starting a week before the holiday at least. | |} ---- ---- ---- ---- ---- You should explain your feels to all the companies that ended their Black Friday /Cyber Monday sales yesterday or today. I'm sure they'd totally get it and just have discounts all month long. | |} ---- You already bought it. You won't get a refund if they do cut the price. Quit crying about how you paid $40 more than you think you should have 7 months ago! Let it go, yo. | |} ---- Dude your delusional, I never said I wanted a refund. I said this game should be 20 bucks and it should. Get over yourself. | |} ---- Where's the reasoning behind $20? At $60 for standard games the publisher is 9 times out of 10 losing money. You're delusional if you think any standard game of this scale would be $20. | |} ---- it's 6 months in the game is hemorrhaging players the likelihood of it making it past june of 2015 without having to go f2p is sketchy at best, if they sold the game for 20 bucks folks would buy it and play, they've already made the big money off box sales, people aren't going to pay 60 bucks for an iffy game, i certainly won't recommend it at 60. edit: i'll check back in a few months to see how it's going | |} ---- Do you have facts on this or is this another doomsday speculation? Either way, have fun in your future endeavors! | |} ---- Allergic to facts and addicted to baseless speculation, what do you think? | |} ---- ---- Lol, this much we agree on. | |} ---- $60 is standard for a game; if you have a link to back up the statement that 9 out of 10 standard games with a $60 box price lose money, I'd love to see it. This game charges for a box and the subscription and any extra plat that you want to buy. If you're still here from launch, odds are that you've paid way more than $60 by now. That would be the reasoning. These games don't make their profits off the box, they make them off the subscription fees and the extra sales from item shops/CREDD. | |} ---- Look, Sno White doesn't make her points very well (obviously) but her basic idea does work out and I'd recommend it. First and foremost as far as reasoning goes is that someone already does it, EVE Online. Essentially, EVE Online is "free" to download; it has no box price. However, it's impossible to play without an account set up. It costs five dollars to set up the account. Once it is set up, of course, you don't get a free month. Thus, unless someone gifts you a PLEX, you also have to pay for your first month's subscription. The upshot? EVE Online has no box price, yet costs 20 dollars to start playing. Why would this be a good idea for Wildstar? First of all, it's a LOT better than the F2P model Sno mentioned. There's nothing worse for a game than to do the reverse, keeping the entry barrier high and the subscription nonexistent means you have to make all the later money from players with promos on the back end, but you still have to convince them to buy the game. Using the EVE model, you lower the barrier for entry, but you make sure that everyone pays for back end maintenance and development. Of the two options, even we current players who already paid in benefit from the latter than the former. We get a population boost of people, none of whom are technically "freeloading", they're all paying for continued development. Another one is that some people want to buy their friends into the game, sort of pay for them to try it out, without actually tying their credit cards to those accounts. Right now, it costs them 60 dollars minimum to do so. Using EVE's system, it would cost them 20 dollars for the CREDD and their friend 5 dollars to set up the account. That opens a whole new stream of people who might try the game out permanently (after the 7 day trial) because their friends will buy them in for the first month. That simply doesn't happen right now. And, of course, NCSoft can continue to sell the 15 dollar upgrade package to people who want the exclusive mount, dyes, and other sundries. Overall, it's a lot better than the idea of trying to make all of your money with box sales and then having to find a way to pay for your long-term success. I'm totally behind them stealing that idea from CCP. The other account ideas they stole from EVE have worked pretty well. | |} ---- I'm not inclined to agree at all with the success of That Other Account Idea that they took from EVE. I think you can draw a straight line between that decision and a number of significant problems this game has had that continue to be a major problem for its reputation going forward. That being said, the problem here is one of trying to have your cake and eat it too. They want the high box price AND the sub AND the cash purchases of CREDD. Good luck with that. | |} ---- I never even thought of that, that's brilliant. | |} ---- While I agree with your later rationale, Psyknis is right about the 60$ box price of games. He's not just talking about MMORPGs. Most of the reason that games lose so much money sometimes is that advertising is expensive. MMORPGs tend to be huge financial hogs during development, but since they take in money constantly, they tend to make it up on the back end. However, a good example is Call of Duty: Modern Warfare 2. That game cost 50 million dollars to develop, then Activision dropped 250 million dollars in advertising for it. That game, for its worth, made money. A lot of it. I think it made over a billion dollars IIRC. However, not every game is a jackpot. For every game that makes their money back, a whole slew never do (sort of the way the film industry works). I'm not sure if 9/10 is representative, but take a look at this article I remembered reading a few years ago. Everything still holds true, AAA game companies essentially can make some decent profits, but it takes a HUGE amount of revenue to do that. Essentially, game companies gamble between ten games on one or two being a big success to handle the flatliners and the failures. 9/10 isn't that far off. We're talking about AAA game companies have billion-dollar revenue costs and having 3-7% profit margins at times. There's truth to that. I'm not sure if that's MMORPG truth. There does come a point in development of an MMORPG where the box price becomes a big problem. That's why Blizzard sells their old expansions for such low costs these days. Imagine if they were still selling those for their old costs. You'd get no one to start playing. Wildstar's not to that point yet, but I do agree that the box price has and always will be more of a hindrance than the subscription price. If they made the box price 20 dollars and kept everyone for three months, they'd lose no potential revenue. At this point, it's probably better than making their money on sales of the box. That price drop was incredibly successful at getting people into the game; a lot of new faces popped onto the server and the forum. I think that speaks volumes about that box price. If Carbine can continue to improve and expand on the game, making their money back on the subscription money alone is very likely. | |} ---- I have a lot of problems with how CCP develops their game, but I always thought their back end account setup was really good. It almost seems like that's what they set up to do anyway, then decided to go traditional instead. It would explain why, even though it's not necessary to buy the first month's sub, you still need a credit card to set up the account. 5 dollars on that and then either you cash a CREDD or pony up another 15$, and you kill the rest of the box price? Seems like, even if it wasn't a good idea at launch, it's a good idea now. | |} ---- ---- Having already had Nazryn lead me on a merry chase around EA's financial statements looking for game-specific breakdowns that weren't there, I'm not terribly keen on repeating the experience. I'm sure that you can point to games that were big successes and games that were big flops; every industry has some products that do both. But the reality is that the overall financial records for a company like EA or Activision aren't broken down by game, and none of the numbers provided in that article say anything at all about how many games a publisher releases that make money and how many lose money. NCSoft does have a game-by-game breakdown, and they aren't even remotely in the 9 fails / 1 success territory. So when you say "9/10 isn't that far off", you're doing the exact same thing Psykins is doing. Link, please. | |} ---- Thank you for so eloquently stating this. | |} ---- Well, we could pick a company. It's a pretty easy assumption to make. You can pull overall sales results and extrapolate information. Activision, one of the most profitable video game companies in existence (they own WoW, CoD, Skylanders, and a whole host of big hit games). Last quarter, they made 8 million dollars in raw profit. That's on the back of their Destiny launch, and as they stated strong sales in D3:RoS and Skylanders. So why only 8 millions dollars? WoW is a billion dollar franchise alone, right? What they don't like to talk about are operating costs. Essentially, to make their games, Activision spent 745 million dollars and earned back 753 in revenues. That means their net income is 8 million, or 1% profit margin over their costs last quarter. Luckily, they had a pretty good year so far. This year, they are 2.833 billion in revenue on top of 2.088 billion in costs, so year to date, they're earning 745 million, or about a 35% profit. So why 8 million this quarter when they were up 35% the combined year? Games underperformed their budgets spectacularly. They just don't want to tell you which ones. I can guess, though. Activision claimed Destiny was the biggest game launch in video game history with something like 11 million copies sold. It also cost 140 million dollars to develop, on top of 360 MILLION dollars in advertising. How successful would Destiny have to be to actually make back that amount of money? How many of their titles have lost money that they made up on the back end, or how many titles do you think fail in one company that all that revenue gets whittled down to 8 million in a quarter? And Activision is undoubtedly one of the most profitable companies in existence. Across all AAA games? 9/10 might not be far off. I don't think anyone has done a comprehensive study on video game booms versus busts given their development and advertising costs vs revenues (there is a VERY good reason video game companies don't want their investors to know exactly which gambles they're taking and which paid off), but you're probably looking at the wrong companies. EA and Activision aren't in bad shape, companies like Capcom are struggling for air. 9/10 might be pretty generous. Despite titles like Resident Evil 6 selling 4.9 million copies, they were budgeted for 7 million, meaning that one of the biggest games they released is also probably their worst flop. Their new Devil May Cry did the same. Despite having some solid releases, including Monster Hunter's continued success in Asia and Dragon's Dogma (sort of a surprise to everyone), Capcom's a poster child for throwing a ton of shit at the wall and seeing what sticks. They released these games in 2013: Dragon's Dogma Quest 2013 Dead Rising 3 2013 Monster Hunter 4 2013 Lost Planet 3 2013 DuckTales Remastered 2013 Ace Attorney 5 2013 Dungeons & Dragons: Chronicles of Mystara 2013 Remember Me 2013 Dragon's Dogma: Dark Arisen 2013 Monster Hunter: Frontier G 2013 Monster Hunter 3 Ultimate 2013 Darkstalkers Resurrection 2013 Capcom Arcade Cabinet 2013 Ghosts'n Goblins Online 2013 DMC: Devil May Cry 2013 That's 15 releases, of which I think two or three even exceeded sales expectations and only one of which really blew predictions out of the water and made back a lot of revenue. That's where Psyknis is getting that estimate. I'm not sure 9/10 failures to successes is accurate, but considering how cut-throat the games industry is at 60 dollars, I'm not sure it's far off the mark. I really would be interested to see if someone broke down sales versus costs of every game in 2013. If they could prize that out of the companies, we'd get a better idea of which titles EXACTLY are underperforming. However, for even successful companies to be hovering at such low profit margins considering the plethora of massive game sales at that level, it stands to reason that production, publishing, and promotion costs have turned video games into a giant roulette wheel, or more like the movie industry. You're just hoping a few mega hits outweigh the bulk of the minor flops and even some of the minor successes. | |} ---- I dunno, considering new single player games are 60 freaking dollars and have maybe 10~30 hours of gameplay and wildStar offered me 230 in the first month even before I started actually working on attunement... 97 hours of speed leveling content in 6 days... I'd say 60$ is pretty god damned worth it. | |} ---- ---- ---- ---- I have an alternative explanation for you. Maybe they don't care how much a game makes in its first quarter, because they're not hypercaffeinated chipmunks like bloggers and the game press. Maybe they care about the game making its money back over a timespan longer than its first weekend. Maybe gaming is like every other retail business in the universe and has sales that spike in the holiday season, which matters far more than the rest of the year. Maybe that's why their profits are negligible in one quarter and 35% over a year. | |} ---- Except that's not what I just said. Year to date doesn't include the Christmas season. What you're saying is that, instead of profits being vastly differentiated, with only a few making a lot of profit, you're proposing that all games make a roughly equal amount of that profit. 8 million in profit for a quarter doesn't split many ways. It might not seem to make a lot of sense, playing those kinds of gambling games in sales, but it's really not as uncommon as you think. I used to work as an electronics specialist at Target what feel like eons ago. Just about every single television we carried came at a loss to the company; I don't think there was a single one we made back cost on. Consumers won't pay more than, let's say, 300 dollars for a TV, so if the TV costs 280 dollars to buy on behalf of your company (not counting how much they paid the employees to distribute, sell, and market it), your options are to sell it at 300 or charge the profit you want to make. Most big chains opt to sell it at a price customers can swallow, even if it's not "worth it". What makes it worth it is accessories. We might have been charging slightly positive or negative markups on TVs, but we were charging nearly double what it cost to buy an HDMI cable. If you can unload one or two accessories on every television, you make it completely worthwhile to sell them. Some people will just buy the TV, some people will buy a whole package of stuff you marked up. What the video game model is a lot closer to are films. Not a lot of films make back their operating budget; even relatively successful movies might not have been successful enough to make back cost (leading to movies you swear everyone saw and owns still being considered failures). That's not what big-budget movie producers are aiming at; they're aiming at making enough on theater and home sales on just one or two films to essentially fund a bunch of middling successes and failures. There might only be a handful of real blockbuster movies that come out in the slew of movies that hit theaters. You have to make sure your company owns one. We talk about that like it's a bad business decision, but obviously it's not. Cranking out twenty games for 60 dollars and enough advertising to make sure everyone knows they exist, then having eighteen fall short, is completely fine if one or two titles are literally making back a billion dollars. Take Activision. Sure, even some of their best selling games didn't make back their budget, but they didn't all need to. One just had to be a huge, huge, huge hit. With only 8% this quarter, it obviously wasn't anything that released recently. At 35% in the last nine months, one game, possibly a few, made back extraordinary amounts of money. And for them, that works. They don't have many other options if they want to keep their pound of flesh on the ante line. Take Capcom, for instance. You never know when you're going to release something like Monster Hunter, one of their unexpected and unequivocal successes. People don't recall that Monster Hunter was released with a whole slew of other games meant primarily to get Capcom's foot in the door of online console gaming on the PS2. Nobody remembers the other games; they were all busts. But Capcom didn't need all of them to succeed, they only needed Monster Hunter, or whichever would blow up that way. They've rode that horse for ten years; I wouldn't be surprised if that franchise all that really kept them solvent through 2013. That high-stakes gambling produces some utter crap, but one or two flying successes can pay dividends for a decade or more. But all games in the modern generation need a lot of work. Games have grown more complex, especially in pure code. The things we want as gamers aren't often necessarily easy to program, and I'm not just talking the previously admitted resource hogs of MMORPGs. I'm talking about things like AI in FPS games. They're becoming incredibly complicated to keep together. If you can get a good third party engine for it, that third party engine is getting a lot more expensive as a result. Costs roll downhill. At this point, the only reason video games cost sixty dollars apiece is because I'm not sure game companies think they can get us to pay more. I've read that in a few recent articles not by bloggers, but by actual developers in open pieces. There's coming a point where you simply can't make a true AAA game and expect to make back the pure development cost on sixty dollars a pop alone. At this point, though, I personally don't think they could increase the price to 75 dollars a game. 60 is already pushing it. That's why the latest trends in video games are all making money in ways other than straight up box sales. MMORPGs, DLC, and the indie game (you can count Steam in there, I guess) movements are all tied to this sort of "peak development". MMORPGs make back their money in tacked-on items or, more purely, by recurring subscription that is literally paying for continued development (in essence making the player and payer the game's backer). DLC allows game companies to continually release new content for products already out the door, essentially increasing revenue after-the-fact even if sales don't make it back alone. Or there's even that trend towards indie games, where small-time developers are making small-time games for small-time money, but the pervasive structures of architectures like Steam are giving them a lot more chance to make the costs back to some degree. It's all tied to this idea that games are becoming more expensive to produce, but game companies can't really justify the increase in price. There's only so much more players will pay for just one game, after all. Until then, though, the big gambles generally award you with a few successes that deal with your failures. Remember that a game can look perfectly profitable and yet not be. That's why game companies are awash in sales numbers, but not development costs. The idea of selling 5 million boxes sounds great on paper unless you budgeted for six million. What seems to be a successful enterprise could be a failure simply because it didn't sell as well as the company expected it to. Hence those absolutely insane expenses I pointed out. Game sales aren't the same as game profit, no matter how much investor updates try to say they are. | |} ---- Missed my point completely. I don't care about YTD and neither does Activision, because--as you rightly note--YTD doesn't include the Christmas season, which is the biggest money-maker of the year. From Activision's financial records: 2012: Q3 $227 mil, Q4 $484 mil 2013: Q3 $70 mil, Q4 $284 mil 2014: Q3 $8 mil, Q4 pending That's why they don't care. They don't need to make their money back in Q3. Video games aren't movies, they'll still be on the store shelf 6 months after release and a lot of people will still be getting them over the holidays. For the record, I also don't claim that all games make a roughly equal profit, which would clearly be stupid. So congratulations on rebutting a completely stupid argument that I didn't make. What I did claim is that if you don't have the numbers on individual games, you don't know whether anywhere near 9/10 games are losses offset by huge profits in the 1/10 bonanzas or not. My point has been and remains that you're basically guessing what's going on and then creating a rationale that fits your conclusion, which may or may not be the right rationale. Because you don't know. You're just guessing. And since even you agree that you don't have the numbers, I'm feeling pretty good about my point. | |} ---- Actually when it comes to MMORPGs, the largest money making season for MMOs is the summer season. This is why so many MMORPGs try to release during or near(early) the summer season. This is why ESO, TERA, Guild Wars 2, RIFT, Final Fantasy XIV:ARR and WildStar(and many others, such as Prius Online and many more) we're released, during the late spring or early Summer to catch the MMORPG release season. This is the timeframe in which MMORPGs make the most money. You can't directly compare a Company like Activision that publishes a vast amount of titles, versus NCSoft that specializes in MMORPGs. | |} ---- The forums here don't like my links, so you'll have to copy-paste them to follow along. I think maybe you missed something in your own point though. I'm not sure if I just didn't make that part of my point clear, and my apologies if I didn't, but the entire point is that those profits are coming from very few launched titles. And Hell, we're even talking about Activision. If we toss in all the AAA games made, from everyone from SEGA to Blizzard, I'm not sure what's so hard to get? Do you have a sales breakdown by game? Because compared to their profit margin, their costs are pretty astronomical. Activision's got it good comparatively, and we're already pointing out their number discrepancies. Gross sales don't look so good when you take into account that you may have spent 400 million dollars in advertising to get there. That's why there's a lot of nuance to this. The video games industry is very opaque with their numbers because they really don't want investors to know the kinds of risks they take. But it's a pretty quick logical walk. Here's where you can pull Activision's 2013 releases (you can get them from wikipedia at lose more money in Q4, meaning that they actually don't end up as rich as you think. And, for comparison, pull EA's numbers (grab EA's numbers from the Nasdaq tracker on Google, click financial). It's easy to do for Nasdaq companies. Their margins also jump in Q1 and Q2, but unlike Activision, EA, a much more representative company of the industry, is shooting back and forth across profitability. As far as the annual data is concerned, they're only just now starting to break even again as far as their profit margin goes. Unlike Activision, EA said they released 31 games. And EA hasn't been doing horrible (they released Titanfall, after all). Capcom managed to keep its profits up by taking a chainsaw to itself, instituting a lot of restructuring so they could survive 2014. They dropped fifteen games last year, and only four this year. Capcom had a bad 2013 and has spent most of 2014 licking its wounds and trying to figure out what the Hell they're going to do. If you've got a better number than 9/10, I'd love to hear it. But with games reporting billion dollar sales and their parent companies reporting profit margins that aren't even positive, you can see why even when companies say their games are selling well, they don't always mean they're succeeding against cost. That's why that Q4 number you're looking at is almost meaningless. They'll certainly make the most money in that quarter, but it won't be where they make the most real money. That real money comes from spring and summer releases, from those bonanza games you were referring to. Long term sales are nice, but they're hurt by incurred costs around that time as well. But you don't have to really even have numbers. I used to sell Wii games. How many of those do you think we needed to order fresh stock on with any regularity? We had slots for 80 current titles in the Wii's lineup in our case, I wouldn't think it was a stretch to say only 8 were big hits. And that's the system that did the best with backwards software. We sent back tons of discs from PS3 and Xbox360 games. Just from the eye test, I'd figure 8/10 was a pretty good figure for AAA games that I knew had definitely made some serious money back. You don't even need to be around paying attention to the specific numbers to know that one or two games you have on the display will sell as fast as you can put them on shelves and the rest sit hoping someone will buy them. That's volatility in action. For every Call of Duty success, it wouldn't surprise me to see anywhere from 7-9 Bulletstorm failures. Not even that they're always bad games, they just aren't profitable as their creators thought they'd be. If you want me to send the links in clickable form, apparently, I'll have to send them through another medium. | |} ---- I vaguely remember buying Star War Force Unleashed II for £40 (don't know what that is in dollars, sorry) and i completed it in 3 hours. So yeah, $60 for a game that will give you 50 hours + is cheap in retrospect. | |} ---- Knowing the pound to dollar exchange rate these days, I think that game cost you 2,000 dollars. | |} ---- I quite agree, which is why I wouldn't. What I would do is ask someone claiming that 9/10 game releases lose money to back that up with some actual evidence, which is exactly what I did. Apparently they don't have it, which is why Vic is now posting massive walls of text trying to reshape the discussion into what he could have just as easily collapsed into a single sentence: "I do not have evidence to back up the statement that the overwhelming majority of AAA titles lose money, but I prefer to continue concluding that they do anyway." | |} ---- ---- ---- ----